Tesla’s Growth Story Is Misunderstood

Tesla’s Growth Story Is Misunderstood

While Tesla’s June delivery growth of 27% was inline with expectations, it was a step down from the company’s 68% delivery growth in Q1 2022. The slowed growth was attributed to the 22-day Shanghai shutdown but the larger impact of China production has been misunderstood. When you dig into the numbers, Tesla’s growth and competitive lead appear to be increasing.

Based on third-party data from The China Passenger Car Association (CPCA), Tesla was producing between 60-70K cars per month in China before the shutdown. CPCA estimated the company made about 11K cars in April and 34K in May, totaling 45K vehicles during the shutdown. Under normal conditions, Tesla would have produced 130K throughout those two months. More specifically, the 22-day shutdown slowed production by about 85K units. Assuming all lost China production would have been converted to deliveries—a fair assumption, I believe—the overall June deliveries would have reached 340K units, up 69% y/y, essentially inline with the 68% delivery growth in March.

Tesla’s lead on legacy carmakers

Tesla’s 69% adjusted delivery growth continues to outpace the US auto industry. We looked at the production rates of 8 other auto companies and found that their US deliveries were down 22% from last year. Comparing Tesla’s global deliveries to the US deliveries of other OEMs may be flawed but the data does illustrate the magnitude of such a delivery gap.

Essentially, Tesla outpaced other auto makers by 91% in June, compared to 75% in March and 90% in December of 2021.